A federal judge on Thursday ordered the bankrupt coal mining company Blackjewel to honor all checks distributed to its hundreds of workers.
Despite the Independence Day holiday, the court convened after several Eagle Butte and Belle Ayr mine workers said banks placed holds on their cashier checks this week.
Lawyers for Blackjewel said all of its employees in Wyoming have checks in hand and they “will be honored.”
Judge Frank Volk urged Blackjewel attorneys to ensure United Bank in West Virginia cleared the checks as soon as possible.
“I consider this matter to be of the greatest urgency,” he said.
Workers were sent home on Monday afternoon after Blackjewel filed for Chapter 11 bankruptcy, but failed to secure a $20 million loan to keep the coal mines — the nation’s fourth and sixth largest in terms of production — running.
In the aftermath of the bankruptcy, some workers have said their paychecks that were usually deposited on Fridays had been withheld. Some also reported that Blackjewel had stopped contributing to their 401(k) plan and health savings account about six weeks ago.
Thursday’s hearing comes one day after the judge approved a $5 million loan to the company, avoiding liquidation for the time being. Company lawyers had said without financing, they would have had to move their case from a Chapter 11 reorganization to a Chapter 7 liquidation.
However, that loan isn’t large enough to return the mines to operation. Instead, it will allow management to perform maintenance at the mines and prevent further damage while the company continues to negotiate additional financing.
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Hundreds of workers, as a result, remain in limbo as the mines sit idle. So many had sought help at the Gillette office of the Wyoming Department of Workforce Services that the agency ran out of information on its “rapid response” programs this week.
The loan came with the additional condition that Blackjewel CEO Jeff Hoops and any of his family members resign. In an email sent to Blackjewel employees, Hoops defended his actions related to the bankruptcy filing and said he loaned the company money to try to help it. A copy of the email was sent to the Star-Tribune. In a text message, Hoops said it was authentic.
In the email, Hoops said he took several steps to try to ensure his employees were paid, including flying more than 700 cashiers checks to Wyoming on his private airplane.
“There has not been one cent taken out of the mining company, the exact opposite I have loaned more money to try and get this company through these difficult times,” he wrote in all capital letters. The email was sent around noon on Thursday.
Former Blackjewel employee Alisha Walker wasn’t impressed with Hoops’ email.
“He tried to make us feel sorry for him,” she said Thursday. “He sat in front of all the Blackjewel employees (before the closures) and told everybody, ‘You are safe, there is job security,’ ... but he lied.”
Walker and her husband, who also worked for Blackjewel, are still unable to access their 401(k). Her husband’s cashier check is still on hold at the bank too, she said.
It’s been a tumultuous time for the mines in the Powder River Basin. In May, Cloud Peak Energy declared bankruptcy. The coal giant owns the Antelope and Cordero Rojo mines. Last month, Peabody and Arch Coal announced a massive deal. While not technically a merger, it would allow the companies to operate the nation’s two biggest coal mines — Black Thunder and North Antelope Rochelle — as a single complex.